Subscription Business Model

This article gives a basic understanding of the Subscription Business Model and the key metrics which are involved with it. It also contains a case study of Netflix, which uses this Business Model, and it’s related metrics.

The subscription business model is a business model in which a customer incurs a recurring cost at regular interims to access a product. The model was spearheaded by distributors of books and periodicals in the seventeenth century and is presently utilised by numerous businesses and websites.

This is one of the predominant business models for modern softwares. On the left is a list of few organisations that use this Business Model. Most common examples include Netflix, Dollar Shave Club, Hotstar, Spotify, PrimeVideo, HelloFresh, and many others.

There are three types of Subscription based Business Models. The first one is…